Unscrambling for Cover
More than 12 million Americans are unemployed but here’s what Three Business Writers at AP wrote on February 7th : “When economy bottoms out, how will we know?” … and they continued:
“When will this wretched economy bottom out? The recession is already in its 15th month, making it longer than all but two downturns since World war II. For now, everything seems to be getting worse: The Dow is in free fall, jobs are vanishing every day, and one in eight American homeowners is in foreclosure or behind on payments.
“But the economy always recovers. It runs in cycles, and economists are watching an array of statistics, some of them buried deep beneath the headlines, to spot the turning point …”
The economy “always recovers”, they wrote. Right. All we have to do is sit and wait. It’s just another one of those “cycles”, as everyone knows. Like Imperial Rome and ancient Greece, maybe?
One of these days, fat, dumb and happy people … like those three writers … will be advised that those economists “watching an array of statistics” uncovered, not “the turning point … buried deep beneath the headlines …”, but another tardy admission from government sources that our “recession” really turned into a depression about a year prior to that day’s verification.
Actually, the “array of statistics … buried deep beneath the headlines …” give no indication of a “turning point”. What’s buried indicates that the very opposite is true. Here are typical examples:
• “‘The current pace of decline is breathtaking,’ said Robert Barbera, chief economist at the research and trading firm ITG. ‘We are now falling at a near record rate in the postwar period and there’s been no change in the violent downward trajectory.’”
• “‘This recession is broader, deeper and more complicated than virtually anything we have ever seen,’ Wachovia Corp. economist mark Vitner said. ‘The whole evolution of the credit markets resulted in all sorts of complex financial instruments that are difficult to unwind. It’s like trying to unscramble scrambled eggs. I don’t know if it can be done at all.’”
• “The World Bank predicts the global economy will shrink this year for the first time since World war II, and sees trade at its lowest point in 80 years … A group of 129 countries face a shortfall of $ 270 to $ 700 billion this year, the World Bank says. It warns international financial institutions will not be able to cover even the low end of that estimate. The bank said only one-quarter of the vulnerable countries will be able to ease the impact of the economic downturn through job creation or ‘safety net’ programs … Should a more pessimistic outcome occur, unmet financing needs will be enormous.”
[Could those three Business Writers tell us how to create manufacturing jobs when twenty million laid-off Chinese are standing in the wings ready to undersell anything we could produce?]